BarbaraD6 (Florida)
Posts: 347
Posts: 347
Posted:
Our manager is the "agent" for our HOA. Is an agent allowed to sign vendor contracts? Their is discussion of that a board member is supposed to sign them.
Help
Barbara
Help
Barbara
A service of:
Community123.com
Professional websites for HOAs & condos, since 2004
Professional websites for HOAs & condos, since 2004
🎁 1st year FREE for HOATalk members! →
Who signs vendor contracts
Started by BarbaraD6 • 8 replies • 2048 views
💬 Join us to post & get advice from 50,000 HOA & Condo leaders.
Create Free Account →
⚡ Takes 30 seconds
Already a member? Log in
DonnaS (Tennessee)
Posts: 5,671
Posts: 5,671
Posted:
Barbara,
The BOD signs the contracts. The P.M or Agent is just an employee of the HOA and has no authority to sign contracts unless the Board has given him/her the written authority to sign. This is a communication issue when the Board might not be aware of contracts being signed by the P.M. But the saying goes---"The buck Stops Here" with the Board having the responsibility of managing the HOA, not the P.M.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Barbara,
I've always felt that is the job of the President who is the chief executive officer of the corp. In fact I would think that it's stated in the bylaws under duties. My bylaws state: "President. The President shall. . .sign all notes, leases, mortgages, deeds, contracts and other written instruments on behalf of the assn. . ." Check your bylaws.
I've always felt that is the job of the President who is the chief executive officer of the corp. In fact I would think that it's stated in the bylaws under duties. My bylaws state: "President. The President shall. . .sign all notes, leases, mortgages, deeds, contracts and other written instruments on behalf of the assn. . ." Check your bylaws.
BarbaraD6 (Florida)
Posts: 347
Posts: 347
Posted:
Mary,
I think I found it "All agreements,contracts,deeds,leases,checks,and other Association instruments shall be executed by an officer,unless the Board provides otherwise,or by such other person or persons as the Board may designate by resolution."
thank you
Barbara
I think I found it "All agreements,contracts,deeds,leases,checks,and other Association instruments shall be executed by an officer,unless the Board provides otherwise,or by such other person or persons as the Board may designate by resolution."
thank you
Barbara
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Barbara,
Good! Just know that I'm still finding things in my docs and I've lived here over 5 years.
Good! Just know that I'm still finding things in my docs and I've lived here over 5 years.
EllenS1 (Florida)
Posts: 1,148
Posts: 1,148
Posted:
The board should vote on whether to accept a contract and the president should sign it. In no way should it be left to the management company. It is up to the board to decide how association money is to be spent. The manaement company is not the party paying for the service and it could open up a can of worms. The company awarding contracts to friends or relatives, kick backs, etc.
JosephW (Michigan)
Posts: 882
Posts: 882
Posted:
An "agent" acts in the name of the asssociation. Once the board has approved the contract, the manager, as agent, can sign it, and it is as binding as if the President signed it. If the management contract creates an agency relationship with the management company, then the management can sign contracts. If the management contract states that they are an "independent contractor", then they are not an agent and cannot sign anything, even if the board approves the contract.
This is nothing unusual in the corporate world. Often the CEO of a company does not sit on the corporate board, but can sign contracts as an agent of the board.
Donna, an agent is not just an employee - they do have the legal power to do many things that will bind the association. To understand it better, check out the Wikipedia explanation:
http://en.wikipedia.org/wiki/Agency_(law)
There is nothing inherently wrong with this relationship. Boards can be responsible for kickbacks, contracts with relatives, etc. as any management company.
However, if the documents require an officer or board member to sign, then the manager, as agent, would be required to abide by that. The key is the wording in the management contract (or employee contract if the staff are all employees of the association) - does it create an agency relationship or not?
Joe
This is nothing unusual in the corporate world. Often the CEO of a company does not sit on the corporate board, but can sign contracts as an agent of the board.
Donna, an agent is not just an employee - they do have the legal power to do many things that will bind the association. To understand it better, check out the Wikipedia explanation:
http://en.wikipedia.org/wiki/Agency_(law)
There is nothing inherently wrong with this relationship. Boards can be responsible for kickbacks, contracts with relatives, etc. as any management company.
However, if the documents require an officer or board member to sign, then the manager, as agent, would be required to abide by that. The key is the wording in the management contract (or employee contract if the staff are all employees of the association) - does it create an agency relationship or not?
Joe
Joseph West
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal
Official HOATalk.com Sponsor
Community Associations Network, LLC
www.CommunityAssociations.net
*See legal notice below (end of page) or go to www.hoatalk.com/legal
DeirdreN (Florida)
Posts: 7
Posts: 7
Posted:
Many associations require 2 signatures on contracts: the agent's and a board member's. This is done for the protection of both parties should any subsequent issues arise. It also insures that the agent and the board are on the same page if both are seeing the same paperwork. It prevents misunderstandings or mininterpretations.
MaryA1 (Arizona)
Posts: 7,043
Posts: 7,043
Posted:
Explain your statement, ". . .it also insures that the agent (PM) and the board are on the same page". The PM should be taking his marching orders from the board; he shouldn't be acting independently. I see no reason for the agent to sign a contract together with a board member. If the PM is acting as an agent of the assn he, alone, can sign the contract although I think it a better practice for the Pres to sign all contracts.
🎯 You've read this entire discussion
Join the conversation with 50,000 HOA & Condo Leaders:
- ✓ Ask follow-up questions
- ✓ Share your experience
- ✓ Get expert advice
- ✓ Access 350,000 discussions
Create Free Account →
⚡ Takes 30 seconds
Already a member? Log in here